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| Trade talks optimism lift markets to six-month high ahead of UK service sector report - business live | |
| (32 minutes later) | |
| Back in the markets, shares in fashion chain SuperDry have slumped by 12% after the company’s co-founder won a seat back on its board -- and the rest of the board resigned. | |
| Julian Dunkerton won his surprise victory after persuading just enough fellow shareholders that he can turn the company around, following falling sales and profits. | |
| But the news that the company’s CEO, CFO and chairman have all walked out in response, leaving Dunkerton as interim CEO, has worried the City. | |
| Shares have fallen to 448p this morning, down from 500p last night -- and 550p before the shock boardroom clear out. | |
| Michael Hewson of CMC Markets explains: | |
| Against such a backdrop it is difficult to be optimistic about the group’s prospects until the dust settles, which means it will be incumbent on any new management to steady the shop quickly or risk further share price declines towards the five year lows we saw at the end of 2018 at 354p. | |
| Since January last year the share price has fallen off a cliff from peaks of 2101p, a decline of over 75%, so it is clear that radical surgery is required. The big question is whether Julian Dunkerton is the man to do it. | |
| Retail analyst Nick Bubb suggests Dunkerton should enlarge his current 18% stake in the firm. | |
| This was not the scenario we envisaged when we made Superdry our “Tip for 2019”, but recovery hopes spring eternal (ahead of the pre-close update on May 9th) and we look forward to the Dunkerton camp putting their money where their mouth is and topping up their shareholdings. | |
| Superdry: Julian Dunkerton wins battle to rejoin firm – and entire board resigns | |
| Newsflash: The Eurozone service sector has grown at its fastest rate in four months. | |
| It’s another sign that the global economy may have turned a corner, after several weak months. | |
| Markit’s service sector PMI, just released, has risen to 53.3, from 52.8 in February. That’s the best reading since last November, showing that growth picked up. | |
| Growth was led by Germany and Spain, where rates of growth strengthened since February, Markit says. Ireland also saw a marked rise in activity, whilst solid growth was recorded in Italy. France returned to marginal contraction. | |
| Good news for Eurozone business morale. Services PMIs rebound in March: Spain 56.8 (prev 54.5, exp 55.0); Italy 53.1 (prev 50.4, exp 50.9); Germany 55.4 (prev 54.9, exp 54.9); France 49.1 (prev 48.7, exp 48.7); Eurozone 53.3 (prev 52.7, exp 52.7) @graemewearden | |
| But, the eurozone dragged down by weaker growth at its factories last month. | |
| So Markit’s composite PMI, tracking both sectors, fell to 51.6 from 51.9. That suggests the eurozone will only grow by 0.2% in the current quarter. | |
| Chris Williamson, chief business economist at IHS Markit, says: | |
| “The final eurozone PMI for March confirms the sluggish end to the first quarter, with business growth ebbing to one of the most lethargic rates seen since 2014. | |
| “Only at the turn of the year, when business was hit by headwinds such as widespread ‘yellow vest’ protests in France and an auto sector struggling with new emissions regulations, has growth been slower over the past four years. The rebound from these temporary headwinds has clearly been disappointing and is already losing momentum, led by a deepening downturn in manufacturing. The goods producing sector reports that global growth worries have intensified, meaning customers continue to pull back on spending. | |
| European stock markets have followed Asia’s lead, with strong gains in most markets. | |
| Germany’s DAX is leading the charge, up 1.3%, with Italy’s FTSE MIB gaining 1%. | |
| This is the fourth day of gains in a row, helping global stock markets to hit their highest levels in around six months. | |
| Britain’s FTSE 100 is lagging, though, because the strength of the pound is weighing on exporters (Burberry, Unilever and Diageo are among the top fallers). | |
| This rally suggests that a US-China trade deal may be ‘priced in’ already. | |
| Paul Donovan of UBS Wealth Management explains: | |
| US President Trump’s trade taxes hurt US listed companies. This caused the equity market to underperform the economy dramatically last year. Hopes of an end to those taxes have caused a remarkable equity rally this year. Now Chinese Vice Premier Liu arrives in Washington to try and do a deal. Markets already expect a deal. | |
| In another encouraging sign, China’s private sector has expanded at its fastest rate in nine months. | In another encouraging sign, China’s private sector has expanded at its fastest rate in nine months. |
| The latest PMI data from China shows that manufacturers and service sector firms posted a stronger performance in March. Service companies led the way, with the fastest surge in new orders in 14 months. | The latest PMI data from China shows that manufacturers and service sector firms posted a stronger performance in March. Service companies led the way, with the fastest surge in new orders in 14 months. |
| Data firm Caixin says there are signs that overseas demand strengthened in March. | Data firm Caixin says there are signs that overseas demand strengthened in March. |
| Chinese companies also saw an upturn in foreign client demand at the end of the first quarter. In the service sector, new export sales rose at the second-strongest rate since December 2017 amid reports of greater activity in international markets. Meanwhile, manufacturing firms signalled a fractional increase in new export orders, following a decline in February | Chinese companies also saw an upturn in foreign client demand at the end of the first quarter. In the service sector, new export sales rose at the second-strongest rate since December 2017 amid reports of greater activity in international markets. Meanwhile, manufacturing firms signalled a fractional increase in new export orders, following a decline in February |
| Here’s the key points: | Here’s the key points: |
| Manufacturers and service providers both signal stronger increases in activity and new work | Manufacturers and service providers both signal stronger increases in activity and new work |
| Renewed rise in manufacturing payrolls leads to first expansion of composite employment for over a year | Renewed rise in manufacturing payrolls leads to first expansion of composite employment for over a year |
| Overall business confidence edges up to seven-month high | Overall business confidence edges up to seven-month high |
| Theresa May’s call for a Brexit compromise is “huge news”, says Jim Reid of Deutsche Bank. | Theresa May’s call for a Brexit compromise is “huge news”, says Jim Reid of Deutsche Bank. |
| He believes it could lower the change of a general election this year -- unless May’s administration is brought down by internal infighting over the plan. | He believes it could lower the change of a general election this year -- unless May’s administration is brought down by internal infighting over the plan. |
| Reid writes: | Reid writes: |
| She is seemingly now prepared to back down on her prior red lines and also prepared to let Parliament decide on the outcome if she and Mr Corbyn can’t. Recall that the customs union option came within 3 votes of passage on Monday. | She is seemingly now prepared to back down on her prior red lines and also prepared to let Parliament decide on the outcome if she and Mr Corbyn can’t. Recall that the customs union option came within 3 votes of passage on Monday. |
| If parliament could muster the votes to pass that plan or an even softer outcome, PM May has now, for the first time, implied that she would negotiate that with the EU without calling for elections. The removal of that risk and that of hopes of a compromise supported the pound as it rallied +0.88% off its intraday lows after her words. In theory this is very positive news for the pound assuming the Conservative government survives the shrapnel from the internal party in-fighting that this will bring. | If parliament could muster the votes to pass that plan or an even softer outcome, PM May has now, for the first time, implied that she would negotiate that with the EU without calling for elections. The removal of that risk and that of hopes of a compromise supported the pound as it rallied +0.88% off its intraday lows after her words. In theory this is very positive news for the pound assuming the Conservative government survives the shrapnel from the internal party in-fighting that this will bring. |
| Theresa May calls for talks with Jeremy Corbyn in attempt to save Brexit | Theresa May calls for talks with Jeremy Corbyn in attempt to save Brexit |
| The pound has hit a one-week high, following Theresa May’s dramatic decision last night to reach out to the opposition Labour party for a Brexit compromise. | The pound has hit a one-week high, following Theresa May’s dramatic decision last night to reach out to the opposition Labour party for a Brexit compromise. |
| The move, with barely a week until Britain could crash out of the EU, has enraged May’s Conservative party. But it’s been received more positively in the City, as it could potentially lead to a softer Brexit. | The move, with barely a week until Britain could crash out of the EU, has enraged May’s Conservative party. But it’s been received more positively in the City, as it could potentially lead to a softer Brexit. |
| Sterling has gained half a cent this morning to $1.318, on hopes that a no-deal Brexit can be avoided. | Sterling has gained half a cent this morning to $1.318, on hopes that a no-deal Brexit can be avoided. |
| BlackRock’s Rupert Harrison argues that Theresa May had no choice but to turn to Jeremy Corbyn: | BlackRock’s Rupert Harrison argues that Theresa May had no choice but to turn to Jeremy Corbyn: |
| Some Tories clearly angry with Theresa May but she really had no other choice - the ERG have scuppered her deal and Parliament has the will and the power to prevent No Deal and secure a delay. There is no other magic option | Some Tories clearly angry with Theresa May but she really had no other choice - the ERG have scuppered her deal and Parliament has the will and the power to prevent No Deal and secure a delay. There is no other magic option |
| As ever with Theresa May she waited to make her move until she really had no other options - one of the reasons we are where we are today! | As ever with Theresa May she waited to make her move until she really had no other options - one of the reasons we are where we are today! |
| Some political analysts scent a trap, though. Will Labour be forced to drop their push for a second referendum (May wants the deal done by 22 May) or left sharing the blame for the Brexit mess? | Some political analysts scent a trap, though. Will Labour be forced to drop their push for a second referendum (May wants the deal done by 22 May) or left sharing the blame for the Brexit mess? |
| Former Nissan chairman Carlos Ghosn’s battle with the Japanese authorities has taken an intriguing twist today. | Former Nissan chairman Carlos Ghosn’s battle with the Japanese authorities has taken an intriguing twist today. |
| Ghosn has taken to Twitter to declare he’s preparing to reveal “the truth” about recent events and announced that a news conference would be held on 11 April. | Ghosn has taken to Twitter to declare he’s preparing to reveal “the truth” about recent events and announced that a news conference would be held on 11 April. |
| The former chairman of Nissan is currently awaiting trial in Japan following his release on bail in Tokyo last month, almost four months after his arrest on charges of financial misconduct. | The former chairman of Nissan is currently awaiting trial in Japan following his release on bail in Tokyo last month, almost four months after his arrest on charges of financial misconduct. |
| Posting his first tweet from a newly created and verified @carlosghosn Twitter account, he said: | Posting his first tweet from a newly created and verified @carlosghosn Twitter account, he said: |
| “I’m getting ready to tell the truth about what’s happening. Press conference on Thursday, April 11.” | “I’m getting ready to tell the truth about what’s happening. Press conference on Thursday, April 11.” |
| I'm getting ready to tell the truth about what's happening. Press conference on Thursday, April 11. | I'm getting ready to tell the truth about what's happening. Press conference on Thursday, April 11. |
| Ghosn, 65, is living under strict bail conditions at his residence in Tokyo until his trial begins, possibly not for several months. | Ghosn, 65, is living under strict bail conditions at his residence in Tokyo until his trial begins, possibly not for several months. |
| The Tokyo district court set bail at 1 billion yen (£7m) after Ghosn’s newly appointed legal team said their client would agree to a list of limitations on his movements and communications. | The Tokyo district court set bail at 1 billion yen (£7m) after Ghosn’s newly appointed legal team said their client would agree to a list of limitations on his movements and communications. |
| Ghosn is accused of underreporting his income by tens of millions of dollars and transferring personal investment losses to Nissan. He faces up to 10 years in prison if convicted on all the charges. He has repeatedly denied the allegations. | Ghosn is accused of underreporting his income by tens of millions of dollars and transferring personal investment losses to Nissan. He faces up to 10 years in prison if convicted on all the charges. He has repeatedly denied the allegations. |
| The Financial Times has cheered the markets by reporting that the US and China are 90% of the way towards a trade deal. | The Financial Times has cheered the markets by reporting that the US and China are 90% of the way towards a trade deal. |
| They say: | They say: |
| Top US and Chinese officials have resolved most of the issues standing in the way of a deal to end their long-running trade dispute but are still haggling over how to implement and enforce the agreement, people briefed on the talks have said. | Top US and Chinese officials have resolved most of the issues standing in the way of a deal to end their long-running trade dispute but are still haggling over how to implement and enforce the agreement, people briefed on the talks have said. |
| Liu He, China’s vice-premier, was preparing to meet Robert Lighthizer, the US trade representative, and Steven Mnuchin, the US Treasury secretary, for a potentially climactic negotiation session starting Wednesday in Washington. The talks are the latest in a series of meetings over the past four months. | Liu He, China’s vice-premier, was preparing to meet Robert Lighthizer, the US trade representative, and Steven Mnuchin, the US Treasury secretary, for a potentially climactic negotiation session starting Wednesday in Washington. The talks are the latest in a series of meetings over the past four months. |
| Although an agreement was within reach, the two sides remain apart on two key issues — the fate of existing US levies on Chinese goods, which Beijing wants to see removed, and the terms of an enforcement mechanism demanded by Washington to ensure that China abides by the deal. | Although an agreement was within reach, the two sides remain apart on two key issues — the fate of existing US levies on Chinese goods, which Beijing wants to see removed, and the terms of an enforcement mechanism demanded by Washington to ensure that China abides by the deal. |
| “We’re getting into the end-game stage,” said Myron Brilliant, executive vice-president for international affairs at the US Chamber of Commerce. “Ninety per cent of the deal is done, but the last 10 per cent is the hardest part, it’s the trickiest part and it will require trade-offs on both sides,” he told reporters on Tuesday. | “We’re getting into the end-game stage,” said Myron Brilliant, executive vice-president for international affairs at the US Chamber of Commerce. “Ninety per cent of the deal is done, but the last 10 per cent is the hardest part, it’s the trickiest part and it will require trade-offs on both sides,” he told reporters on Tuesday. |
| US and China draw closer to final trade agreement https://t.co/xSmmn2KWRd | US and China draw closer to final trade agreement https://t.co/xSmmn2KWRd |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| Fresh optimism that the US and China could end their trade war is pushing markets higher this morning. | Fresh optimism that the US and China could end their trade war is pushing markets higher this morning. |
| Asian stocks have hit their highest level in seven months today, with gains in Tokyo, Shanghai, Seoul and Hong Kong. Optimism is on the rise, shaking off worries about the global economy. | Asian stocks have hit their highest level in seven months today, with gains in Tokyo, Shanghai, Seoul and Hong Kong. Optimism is on the rise, shaking off worries about the global economy. |
| The rally comes as China’s Vice Premier Liu He heads to Washington with a group of trade negotiators, in another push for a deal. | The rally comes as China’s Vice Premier Liu He heads to Washington with a group of trade negotiators, in another push for a deal. |
| White House economic adviser Larry Kudlow has fuelled optimism of a breakthrough, telling the US Chamber of Commerce that: | White House economic adviser Larry Kudlow has fuelled optimism of a breakthrough, telling the US Chamber of Commerce that: |
| “We expect to make more headway. I can’t report any of the details, but it’s a larger, grander discussion than anything we’ve had before in U.S.-China trade relations, and there’s a certain amount of optimism. | “We expect to make more headway. I can’t report any of the details, but it’s a larger, grander discussion than anything we’ve had before in U.S.-China trade relations, and there’s a certain amount of optimism. |
| The tit-for-tat tariffs imposed by China and America on each other’s goods have been blame for the slowdown in global growth recently, so investors are desperate for signs of détente. | The tit-for-tat tariffs imposed by China and America on each other’s goods have been blame for the slowdown in global growth recently, so investors are desperate for signs of détente. |
| President Trump will also be keen to announce a victory, especially as the US economy seems to have cooled of late. | President Trump will also be keen to announce a victory, especially as the US economy seems to have cooled of late. |
| However, hawkish members of the US administration will be demanding significant concessions from Beijing, on issues such as intellectual property protection. So there’s no guarantee of a breakthrough this week. | However, hawkish members of the US administration will be demanding significant concessions from Beijing, on issues such as intellectual property protection. So there’s no guarantee of a breakthrough this week. |
| Oil is also benefitting from this morning’s wave of optimism, hitting its highest level since the start of 2019. | Oil is also benefitting from this morning’s wave of optimism, hitting its highest level since the start of 2019. |
| Yesterday, world markets hit a six-month high, with Britain’s FTSE 100 jumping over 1% to its highest level since October 2018. European markets are expected to push higher today. | Yesterday, world markets hit a six-month high, with Britain’s FTSE 100 jumping over 1% to its highest level since October 2018. European markets are expected to push higher today. |
| European Opening Calls:#FTSE 7401 +0.14%#DAX 11850 +1.44%#CAC 5461 +1.02%#MIB 21721 +0.92%#IBEX 9440 +1.06% | European Opening Calls:#FTSE 7401 +0.14%#DAX 11850 +1.44%#CAC 5461 +1.02%#MIB 21721 +0.92%#IBEX 9440 +1.06% |
| Also coming up today | Also coming up today |
| The latest surveys of purchasing managers (PMIs) will show how the world’s service sector companies performed last month. | The latest surveys of purchasing managers (PMIs) will show how the world’s service sector companies performed last month. |
| The UK Services PMI is tipped to dip to 51.0, from 51.3, signalling little growth in March. | The UK Services PMI is tipped to dip to 51.0, from 51.3, signalling little growth in March. |
| Europe could do better, with its services PMI expected to hold at 52.7, while America probably had a stronger month. | Europe could do better, with its services PMI expected to hold at 52.7, while America probably had a stronger month. |
| The agenda | The agenda |
| 9am BST: Eurozone services PMI for March | 9am BST: Eurozone services PMI for March |
| 9.30am BST: UK services PMI for March | 9.30am BST: UK services PMI for March |
| 3pm BST: US services PMI for March | 3pm BST: US services PMI for March |